Question

The shares of Corine’s Candies Inc. are currently trading at $18.20. There are four million shares outstanding. The company’s 2012 net income was $5.2 million. Find the market value of equity for the company and the P/E ratio of the shares.At the end of 2011, Corine’s Candies Inc. had total shareholders’ equity of $13.8 million. In 2012, the company had net income of $5.2 million and paid out half this amount in dividends, resulting in shareholders’ equity at the end of 2012 of $16.4 million. Use the average amount of shareholders’ equity to determine Corine’s ROE for 2012.